Tuesday, March 31, 2009

"Do you think that you have too closely identified yourself with the US on several issues that, perhaps, you have also created some doubts in the minds of people?

Many in the Left have been going around thinking that I am some sort of an American agent. I find this slightly odd because the Left was the first to correctly denounce the George Bush administration’s veto of me in the race for UN Secretary-General. If I were an American agent I would probably be there (the US) and not here... So this seems a slightly preposterous charge..."

It is not new when companies donate money to parties. But transformation of this idea is still not yet under way.

There could be a Private Consolidate Fund of India (PCFI) which can fund political parties (candidates) that link practical policies that have alternative option to poster the society.

In fact in the present funding system many people really do not know how much they spend on one non criminal candidate and a criminal candidate.

This PCFI could be an independent bank of charity to manage funds. It should never accept money from any form of Government.

According to Bibek many industrialist donated money to political parties. He writes in the Indian Express that:

“The UTVI channel has used the RTI Act to collect data on income tax returns filed by political parties. The figures are sometimes for 2007-08, sometimes for 2008-09. So we know, the largest donors have been Aditya Birla group, Torrent Power, Videocon, Salgaonkar, Dempo, Chowgule, Charitable Trust, Jubilant Enpro, Kamaljit Singh Ahluwalia, Timblo, Prime Builders and Developers, Honda Siel, Trans Indian Freight Services and United Phosphorus.

I am told some corporate boards insist donations should be evenly spread out, not necessarily equally, but perhaps in some proportion to seats in Parliament. But that’s not what this list shows. Aditya Birla prefers Congress, Kamaljit Singh Ahluwalia prefers BJP and Honda Siel prefers Samajwadi Party.”

There is interview in the rediff with Tamil Nadu actor turned politician “Popularly known as S Ve Shekher, he shares his mobile number with all the residents of his constituency and is always accessible to them.

He recently created a flutter when he announced his decision to resign from the AIADMK. He also submitted a memorandum to Tamil Nadu Chief Minister M Karunanidhion March 30, asking for seven per cent reservation for the Brahmin community”.

The following are excerpts:

“Are you planning to resign from the AIADMK?

Definitely. Now, I will give a memorandum to the chief minister asking for seven per cent reservation for the Brahmin community (he submitted it on March 30). If the government appoints a committee, I will resign from the Mylapore constituency. In a by-election, it is always the ruling party that wins.

Why do you feel Brahmins need reservation in Tamil Nadu?

Why should they not get reservation? In Tamil Nadu, 69 per cent of the people get reservation and ninety five per cent of people enjoy some kind of reservation except the forward community. Where is social justice? There are over 40 lakh Brahmins in Tamil Nadu. It is the government's duty to give equal opportunities to everyone. Brahmins have been eliminated, insulted and sidelined in so many ways. You cannot punish people for what happened over 50-60 years ago.

Now that you are talking to the press about your decision to quit, what is the feedback that you are getting from your party chief?

You don't know the AIADMK. Once the party starts ignoring you, they don't bother about what you do.

Usually, people switch parties when they have some case regsistered against them. I have never been booked for anything -- not even for riding double on a bicycle. I am an MLA but I don't go in the opposite direction on a one-way street, I don't park in a no-parking zone. I am a 100 per cent law abiding citizen.

Once I decide to quit, I will send a letter to the party supremo and I will conduct a sms poll on the decision. I will hold a public meeting in my constituency as I feel I have a responsibility to the people who voted for me. At the public meeting, I will tell the people how I joined the party, why I am resigning and what I will do now”.

I have been observing in India and abroad how the present stand of liberalism moves forward. I find increasingly diluted even among the well experienced liberals. For instance, in today’s Business Standard Professor Deepal Lal argues “….US banks urgently need to be restored to health, perhaps through temporary nationalisation as in Sweden in 1992”. This is a dangerous suggestion. I have no idea how he reached this conclusion. Though, he gives some explanation in the article essentially the major difference between Hayek, Keynes and Fisher and Wicksell theory.

But I remember what Anna Schwartzsaid"we won't have a capitalist system . . . People are responsible for the decisions they make. If they've made wrong decisions, lost money and don't have the funds to operate, well, it's time to leave the market. And that's what the Fed's responsibility is, not to shore up firms that have no reason to continue."

Friday, March 27, 2009

Quite nicely Shoba Narayansays“…as countless teachers (the good ones, anyway) prove every day, a legacy can also involve touching minds and hearts. To distil the idea to its simplest possible element, I would argue that you don’t even have to be a teacher to leave behind a legacy: You could be a homemaker like Prabha auntie”.

But sadly, teachers in Indian school, colleges and universities do all sort of thing except teaching. This whole situation may be one of great wonder of Indian democracy invention.

Thursday, March 26, 2009

T. C. A. SRINIVASA-RAGHAVANasks perhaps good question “Why is it that if India has an approach to something, Indian economists wait for it to be validated by the West before they accept it? Indeed, why do they attack the Indians who advocate that view before such validation is bestowed by the West? I genuinely believe that the Finance Ministry, which funded the Mistry report, and the Planning Commission, which funded the Raghuram Rajan report, have some serious explaining to do. As indeed do the economists who toed their line and kept up LeT like attacks on the RBI.”

I also hunch that partly or fully TCA knows the answer as his is a veteran of Indian economist’s views. But there are groupism views in India like he has been advocating Dr Reddy rule of Central Bank.

At least it is not surprising me when he says "approach to something" and “they will land you in trouble” when ourselves prepared to land in trouble like the one ‘socialism’.

Well, this is as usual election time, but in different time. Many things have changed except the Darkness India which lives outside the domain of every policy maker, leader, official’s mindset.

Nevertheless, Chacha Manmohan Singh has tried his best to do in the last five years like an open mind child trying to learn and do in primary school (class one to five). I am sure he will get pass mark for last five years but I am not sure whether this will help him to enter his sixth class.

One outside Darkness teacher says all the “good men” become ‘bad men’ at the end of the five years term except Chacha Manmohan Singh. People in Darkness still do not know what these good men turned bad men did for them. It’s not the mistake of these Darkness people but it might be a big mistake of these good men turned bad men.

No matter how bad men all these persons but they are all good friend in their past and future life.

Wednesday, March 25, 2009

Eminent economist Mr Nani A Palkhivala said in his Convocation Address to KarnatakaUniversity on 2nd February 1974, at Dharwar that “All growth depends upon energetic activity. There can be no development without effort, and effort means work. Work is not a curse to be kept at bay by holidays and bandhs; it is the prerogative of intelligence and the only instrument for national advancement. What the country needs is dirtier fingernails and cleaner minds.”

Now, among Indian intelligentsia many think that the grownup has more biased opinion than the younger people. For example, former President of India Dr Kalam said in a recent interview that “the youth have fewer biases about their society as compared to the grown-ups.”

But the question arises if the youth have “fewer biases” than why are millions of youth just follows the foot path of criminal politicians. Do they think before joining a political party?

No doubt there are good politicians. But the bad one seems to be attracting more youth as compared to good politicians. It’s not true?

The other pathetic condition is in the Indian education system which is suffice to grow once one “vote motive” community.

The Nani A Palkhivala address titled “Education and Youth in A Democratic Society” later published by Forum of Free Enterprise, Bombay.

Monday, March 23, 2009

“…where property titles are ill-defined, where legal disputes takes decades to settle, where poor farmers or small businessmen face eviction threats, it is difficult to imagine how they can behave like textbook economic agents, namely, taking a long-run view, saving, investing, and climbing their ways out of poverty. Security of property rights therefore is of utmost importance.

The term property right refers to an owner’s right to use a good or asset for consumption and/or income generation (referred to as “use rights”). This can also include the right to transfer it to another party, in the form of a sale, gift or bequest (referred to as “transfer rights”). A property right also typically conveys the right to contract with other parties by renting, pledging, or mortgaging a good or asset, or by allowing other parties to use it, for example, in an employment relationship.

By property rights, economists typically refer to private property rights, a key feature of which is being able to legally exclude others from using a good or asset. This affects resource allocation by shaping the incentives of individuals to carry out productive activities involving the use of the good or asset, undertake investments that maintain or enhance its value, and also, to trade or lease it for other uses.”

Friday, March 20, 2009

Professor Deepak Lal was called a urgent meeting ofThe Mont Pelerin Societyto discuss the global crisis and in his address to the meeting said:

“My greatest fear is that this crisis- and the responses to it- will stall or reverse the wholly benign process of globalization, which dates from the China's opening by Deng Tsiao Ping in 1978, and the reversal of India's Permit Raj in 1991. This has lifted more people from abject poverty than has ever been seen in human history.

It is notable that unlike the bowdlerized Keynes in the back pockets of Western politicians, the Chinese premier Wen Jiabao in an interview with theFinancial Timesat Davos said his bedtime reading was Adam Smith'sThe Moral Sentiments!

As will questions about the moral basis of capitalism. The shameless greed shown by many bankers- who have smashed the institutions they were charged to nurture on the rocks- is leading to a popular backlash against capitalism. This takes us back to questions raised by the great thinkers of the Scottish Enlightenment, who saw a common morality as providing the cement of society. A morality primarily dependent on a society's traditions and forms of socialization, based on using the moral emotions of shame and guilt, and not reliant on either God or Reason for their acceptance. How can the Victorian virtues embodied in the notion of the English gentleman which are today to be found more often amongst the burghers ofBombayandShanghaithan the denizens of Wall Street “The City” andHollywoodbe inculcated? These are virtues which denoted a distinction of character rather than class, and consisted of 'integrity, honesty, generosity, courage, graciousness, politeness, consideration of others."21 They constituted the 'sympathy' which Adam Smith considered the highest virtue which allowed healthy ambition to be combined with an empathetic conscience to promote social stability and order.

…..what is the way to challenge the political correctness which is leading to the abuse of reason in the humanities and many social sciences in our citadels of higher learning and which increasingly provides the intellectual lens through which most politicians view numerous public policy issues? Last but not least, how can the growth of theNannyState's undermining of Mill's principle of liberty be countered? These are some of the many questions raised by the current crisis which fall within the mandate of the society as seen by its founders”.

“Hayek, rejected in the 1930s, and feted in post-Keynesian times, did not make the grade in terms of public policy. Hayek had a theory of how it was banks which made mistakes of ‘mal-investing’ if credit was too cheap and how when they realised their error they jacked up the cost of credit and caused a crisis. But even Mrs Thatcher thought that his recipe was too severe. Hayek did not believe in rescuing banks or reflating the economy. He believed that capitalism only works if players are able and willing to take costs as well as rewards of free market.

Hayek lost but Chicago was triumphant. Bill Clinton and Tony Blair became globalisers. Clinton balanced the budget and Gordon Brown promised some golden rules to avoid booms and bust. There were more converts”.

Thursday, March 19, 2009

Jeb Brugmann,suggests“….that Dharavi not only be preserved and steadily upgraded, but be designated a United Nations World Heritage Site to protect it from expedient development schemes that would deny India the exemplar of one of its native forms of urbanism.

The United Nations applies four main criteria when selecting districts in cities like Havana, Liverpool, Quito, and Prague for World Heritage Site protection. Dharavi scores high on all accounts”.

Wednesday, March 18, 2009

In the morning I read three articles the subject of article vary from financial crisis to urbanization and false theory of economists.

First, in today’s ET Joseph E. Stiglitz has article in which he says that “Trickle-down economics almost never works” it comes after doing a significant damage which the present academic community fails to understand and give up the theory.

Second, fight over whether macroeconomics was advanced or not after 1970s. Typically T. C. A. Srinivasa-Raghavansays by quoting Keynes who said in 1931 that “If economists could manage to get themselves thought of as humble, competent people on a level with dentists that would be splendid.”

And “he is also intensely critical of the tendency introduced by engineers-turned-economists to look on the real world as a sort of machine where pressing the right buttons leads to predicable outcomes.”

In case of India it includes Raghuram Rajan also.

T. C. A. Srinivasa-Raghavan earlier criticizedRaghuram Rajan report on financial sector reform saying “unfortunately, and thanks in a large measure to the data boys, especially those with engineering backgrounds, this has become a generalised problem in macroeconomic analysis and policy wonking. So even though they pour scorn on anecdotal evidence, the data boys have become guilty of the same methodological flaw. They confuse correlation with causality and use induction and deduction inter-changeably.”

Third, in India many think Bibek Debroyis a liberal economist but some time seem to be a terribly Keynesian economist. He writes in today’s Financial Express “In the long run we are all dead.” Most people know this Keynes quote and most non-economists probably think it is from General Theory (1936). It is actually from A Tract on Monetary Reform (1923), written well before those troubled times. Given these troubled times, the subsequent sentence has relevance for the tribe of economists. “In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.”

Tuesday, March 17, 2009

In a lunch interview to BS historian Romila Thaparsays……. “Controversy is a part of the advancement of knowledge. There wouldn’t have been an advance of knowledge unless there had been controversy — look at Galileo, for example, what he propounded was hugely controversial but it led to an advance in knowledge. Questioning is essential to teaching, and we don’t have enough of that. Instead, we treat information as knowledge and the child is told, ‘Now you learn this and repeat it in the exam’.”

But what is important to note here is what Anna Schwartzsaid "we won't have a capitalist system . . . People are responsible for the decisions they make. If they've made wrong decisions, lost money and don't have the funds to operate, well, it's time to leave the market. And that's what the Fed's responsibility is, not to shore up firms that have no reason to continue."

Monday, March 16, 2009

It is not at all surprising me when Professor Dipankar Gupta says “The BJP's 1991 manifesto only mentioned that it would strive to "relocate the ancient structure" and build a Ram temple elsewhere. Not a word about demolishing the Babri Masjid. Read the 2004 Congress manifesto today, and what a surprise. Even the phrase "nuclear energy" is nowhere to be found; ditto for the UPA's common minimum programme too.” And he never mentioned the ugly situation of left parties and they take advantage of as “..Most people are not able to read or write without spelling a word at a time. A little over 65% may be officially literate, but for the bulk it just means substituting thumb impressions for a scrawl. As for the literates, they want action without ideology for the written word has meant so little for so long.”

I and my friend Jayakamal have attended a Nani Nani Palkhivala memorial lecture in 2002 after our undergraduate examination in economics in MadrasUniversity. The Lecture was delivered by Mr Ram Jethmalani on “Law Commission And Uniform Civil code”.

But ironically Mr Ram Jethmalani now says “…Our Finance Ministry must now study the principles of Keynesian economics which worked for the US during the 1930s and for almost all European countries during World War II.”

“The net result is more than 60 years after Independence less than one in 10 MPs or MLAs in India is a woman. According to PRS Legislative Research, women accounted for less than 7% the total MLAs in 28 states and two Union territories and little over 9 % of the total number of MPs in the last Lok Sabha.

But having said that, it is nothing but hypocrisy when a political class that regards reservation as an answer to social discrimination suffered by SCs, STs, and now OBCs,”

We do not know the actual percentage of SCs, STs MLAs, MPs from each major political party.

Saturday, March 14, 2009

So is economics in need of a major shake-up? Should we burn our existing textbooks and rewrite them from scratch?

Actually, no. Without recourse to the economist’s toolkit, we cannot even begin to make sense of the current crisis.

Why, for example, did China’s decision to accumulate foreign reserves result in a mortgage lender in Ohio taking excessive risks? If your answer does not use elements from behavioural economics, agency theory, information economics, and international economics, among others, it is likely to remain seriously incomplete.

The fault lies not with economics, but with economists. The problem is that economists (and those who listen to them) became over-confident in their preferred models of the moment: markets are efficient, financial innovation transfers risk to those best able to bear it, self-regulation works best, and government intervention is ineffective and harmful.

Economics’ richness has not been reflected in public debate because economists have taken far too much license.

When economists disagree, the world gets exposed to legitimate differences of views on how the economy operates. It is when they agree too much that the public should beware.

Sadly, in view of today’s needs, macroeconomists have made little progress on policy since John Maynard Keynes explained how economies could get stuck in unemployment due to deficient aggregate demand. Some, like Brad DeLong and Paul Krugman, would say that the field has actually regressed.

It is not surprise to me when Mr Dani did not mentioned economists like F A Hayek, Mises who actually explained about how “John Maynard Keynes explained how economies” functions “in unemployment due to deficient aggregate demand.”

“……….a leader like Modi demonstrates how the century can also go very wrong when charismatic politicians use modern electoral tactics and technology to create and exploit social divisions, and then pursue their political and economic goals with cold bureaucratic efficiency. And here is why Modi is so important: although he is not his party’s standard-bearer going into this spring’s national elections, his popularity and influence in the BJP mean that he could one day be governing the world’s largest democracy.

Gujarat’s post on a frontier zone of the subcontinent exposed the state to repeated Muslim invasions. Some of the worst depredations came at the hands of the Turco-Persian rulerMahmud of Ghazni, who swept down from eastern Afghanistan and in 1025 destroyed the seaside Hindu temple of Somnath. During a trip to India last fall, whenever I mentioned the events of 2002 to Hindu nationalists, they would lecture me about the crimes of Mahmud of Ghazni. For these Hindus, the past is alive, as if it happened yesterday.

…….the spread of education made people aware of their own histories, supplying them with grievances that they never had before. “The Hindu poor are blissfully ignorant of Mahmud of Ghazni. It is the middle class that now knows this history,” explained one local human-rights worker. That is why Hindu nationalism is strongest not among the poor and uneducated, but among the professional classes: scientists, software engineers, lawyers, and so on. In the eyes of this new, right-wing cadre of middle- and upper-middle-class Hindus, India was a civilization before it was a state, and while the state has had to compromise with minorities, the civilization originally was unpolluted (purely Hindu, that is)—even if the truth is far more complex.

At 5 p.m. sharp, I was ushered in. Modi sat behind a desk that looked over a long committee table. He wore traditionalpaijamapants and a long, elegant brown kurta—ironically, the traditional dress of India imported by theMughals. A row of pens lined his pocket. Rimless glasses rested on his face. He had a clipped and distinguished salt-and-pepper beard. His was a handsome, welcoming visage. A small stack of documents lay in front of him. He thrust them at me before I even asked my first question. “I heard you were interested in development here, so here are your answers.” What he gave me was not the usual promotional brochures, but long lists of sourced statistics put together by an aide. Gujarat had experienced 10.2 percent annual GDP growth since 2002. It had eight new universities. In recent years, almost half the new jobs created in India were in Gujarat. The state ranked first in poverty alleviation, first in electricity generation.

I have met Jimmy Carter, Bill Clinton, and both Bushes. At close range, Modi beats them all in charisma. Whenever he opened his mouth, he suddenly had real, mesmerizing presence.

I wondered if Modi felt differently behind closed doors. By all accounts, after the riots, he manically dedicated himself to development, sleeping less than four hours every night, up at 5 a.m. to check his e-mail and read the local papers, visiting about 3,000 of the 7,000 villages in the state, and empowering the lowest reaches of its bureaucracy through his slogan, “Less government, more governance.”

His words echoed through the empty room. “I have a toll-free number where callers hear my recorded voice and can make complaints against the government, and the relevant department must respond within a week.”

These forces appear sufficiently grounded either to reject Modi at the national level or to contain his worst impulses as he moves—as many expect he will—from Gandhinagar to New Delhi. After all, the churches and bastions in Diu are ruins not because they represent an idea that failed but because they represent no idea at all, whereas India has been an idea since Gandhi’s Salt March in 1930. Either Modi will fit his managerial genius to the service of that idea, or he will stay where he is. Hindus elsewhere in India are less communal-minded than those in Gujarat, and that will be his dilemma”.

“He has reduced the leakage of government revenue that goes all over India into enrichment of politicians and bureaucrats, and diverted it to building up Gujarat’s infrastructure. And out of his own necessity, he has publicized Gujarat’s good administration. Modi’s success is more due to Gujarat than the other way round. But he is an autocrat, and has used his autocratic powers to give Gujarat a considerable competitive advantage over other states. His intellectual equipment is limited, but he has concentrated it in a remarkable manner to rebrand Gujarat, to his own collateral benefit.”

Friday, March 13, 2009

I was not sure who will teach me what, how and why in my life in the past in even now. Why I am saying means I read an excellent piece in India-Seminar which bring some interesting questions and thoughts in “learning, edification, adult, child etc”.

“Throughout my education, the only thing missing was learning. I didn’t know where its limits might start. Maybe we learn to gain praise and appreciation from adults or to show-off to fellow learners. It may include the knowledge of everything, but from an adults’ perspective.

I truly believe that the only place where one learns nothing is the school, and even if one does learn something there, it will be questioned sometime in the future,

After schooling, whenever I was at a social gatherings, I simply stood silently, waiting to be commanded because that was what I had learnt in my school, i.e., to shut my mouth, do as I was told, and not use my brain.

I don’t think that one can be such a bad learner that one fails to learn even 33 per cent of what is taught in 365 days and may fail again if given one more span of 365 days to learn it again. Surely it makes one doubt the things required to be learnt and definitely the person involved in teaching it. It is not a child’s fault if she frequently fails to learn a concept, totally alien and meaningless to her.

I was permitted by the school authorities to go and sit in room number 8, class I-B, roll number 37. I was handed over to some adults called ‘teachers’ who appeared to be mentally and physically sound. I had to call them ‘madam’ or ‘sir’ depending on their voice and the kind of clothes they wore, though they had the right to call me the way they pleased. I had to respect them no matter how much they humiliated me.

Going to school, carrying all the knowledge tools in my bag, still remains a mystery to me. I wonder why I had to go to school if all I had to learn was in my school bag itself. Teachers simply read to us from books and took tests; wasn’t this something any child can do once she masters literacy skills? As far as comprehension and implication of a concept are concerned, these were never valued by any teacher.

Everything was funny and strange at school, like eating only when the bell sounded, opening a book to read a piece of given knowledge only when the clock said or the teacher demanded. Some of my classmates would cry hard, wanting to go back home as if they had come to school at the cost of their ongoing top secret inventions. I disliked those long assemblies in the morning. I remember sweating profusely, about to faint on a hot morning, still praying, eyes closed, to someone whom I had never known and whenever I opened my eyes I found the teachers standing by as if I had just finished worshippingthem. After one week, my actual class teacher came to me, held my ear and pulled me to I-B, shouting that it was there that I was supposed to sit andlearn.

Then began my journey to be an ‘ideal student’. An ideal student is one who listens the most, questions the least, and never shows individuality..........

All I did was to wake up early at the cost of my wonderful dreams and thoughtful imagination, walk into a scary building, sit there, stuck to the place allotted, continuously staring at the teacher in order to convey that I was listening to the nonsense syllabus articulated by her. I would sit there for six hours, six days a week, waiting with all concentration for the last long bell that would convey the end of yet another dull part of the day.

How could I risk my life simply to know the school building fully, when every time one tried, one faced the highest probability of meeting a heartless devil given charge of keeping children inside their allotted cells?..........

Recess used to be the most threatening time of the day when adults went out of sight, to their caves, leaving children free to be on their own. This was the time when students, who pretended to be passive, adult-operated machines became active and alive – leaders, followers, enemies, explorers and social workers. I hated recess as it required me to show off my hidden potential to amaze other children and gain entry into their world. But how could I betray the adults?I chose to follow them and preferred sitting motionless at my place. I was practicing to turn myself into a mindless robot working on their demand.

In the very first grade I was made to believe in my inability to do anything on my own. There I found out that there is one teacher while there are forty students; the teacher can’t possibly give time to all of them but all forty students must give all their time and everything to that teacher.

Once my Hindi teacher asked us if we could recall all the Hindi consonants in the right order. At once I looked at the floor, hoping that she wouldn’t see me. I was lucky as her eyes fell on a boy. What a brave boy he was; he questioned her if she herself knew all the consonants. This was enough to bring out the devil in her. All she could think of in retaliation was to shout and punishing him for having dared to question her knowledge. In the end she left us speechless by reciting all the Hindi consonants in the exact order. I wonder why it matters if one can utter the alphabets in the correct order or even know them while one is not allowed to speak one’s mind, think what one wants, or say what one feels”.

PS: I have never carried a bag, water bottle, even some time the authorised books, no uniform but walked 20 Km daily up and down by side seeing the farm field, mountain, men at work, cattle field till grade 12 with my mind. But I was asking myself what is the purpose of learning, why one should learn all which are learned by adult, etc. It took another few years to understand these questions.

In 2005, I bought the book of Professor Amartya Sen’s “The Argumentative Indian: Writings on Indian History, Culture and Identity” but never crossed beyond the introduction for no reasons but for his muddled arguments which I read (reading even now) elsewhere. But I have read Mr Ramchandra Guha’s review with interest in the Economic and Political Weekly, October 8-14, 2005.

“I was quite intrigued by the reactions of several friends of mine to The Argumentative Indian. Many had started reading it but only a few could sustain their interest to the end. Those who, having started it, kept it away .for later reading found it repetitive and often detailing arguments too familiar to be rehearsed by a laurite. While some repetition was unavoidable, given the nature of the book, I should hate to think that the disappointment of my friends was widely shared.

Guha describes Sen as a Bengali cosmopolitan, Indian liberal, left-wing democrat and a broad-minded economist. I wouldn.t be surprised if, armed with Guha.s certification and Sen.s defence of multiple identities, some member of the SP (a flock of birds with saffron feathers), suspending temporarily his participation in the construction of the Temple, rushed to Harvard to put Sen on a head-shrinker.s couch for multiple personality disorder!”

I have no doubt I will not read Lalit’s 17 page review titled “Thank You, Professor Sen” in the Indian Journal of Human Development, Vol. 1, No. 2, 2007

Again it is not surprise to me at least, when I was student of economics in MadrasUniversity my guiding professor teaches a subject ‘Economic Growth and Development’. Unfortunately, he could not teach us about why and how Professor B R Shenoy wrote a ‘dissent note’ to the second five year plan of India. What was his macro view of Indian economy at that time and what he had suggested?

In another interaction I asked my professor who did not Indian economics professor were not aware of different ideas like the one Austrian Economics, for instance? His answer was “different ideas exist in different part of the world”. So simply he managed to escape the situation.

I asked one of my professor who taught statistics for economists in our undergraduate course, did he ever heard about Austrian Economics his answer was “yes” but never taught us about those people’s ideas and contribution. The other reason that he told us was that these ideas was not part of our syllabus.

In the course we were forced to learn all kind of muddled socialism. The terrible is it still prolongs in every department of economics in India.

Mr S. S. TARAPORE who was in RBI and writes in today’s Business Line newspaper. “In India, we have scant interest in economic history and thereby are unable to learn from the mistakes of the past”…… and “most Indian economists would be unaware of this important report.”

My other professor who taught us public finance used to asks us whether we read newspaper daily or not. When we don’t he simply called us “walking dead bodies”. Somehow I applied this logic to a few professors in the department who never ever wrote a research paper during their 20-30 year professor career. This is only one example think of hundred of universities around the country.

Prof Manoj writes in today’s ET “The world is contracting in real terms and it is time to read John Maynard Keynes not Milton Friedman.”

But he forgets to read what Prof F A Hayek and others have said for example Mr DICK ARMEYwrote in a recent article in WSJ:

"In the long run, we are all dead," John Maynard Keynes once quipped. An influential British economist, Keynes used the line to dodge the problematic long-term implications of his policy proposals. His analysis of the Great Depression redefined economics in the 1930s and asserted that increased government spending during a downturn could revive the economy.

President Barack Obama and congressional Democrats (very few of whom likely have read Keynes's 1936 book "The General Theory of Employment, Interest and Money") have dug up the dead economist's convenient justification for deficit spending in defense of their bloated stimulus legislation. But none ask the most important question: Was Keynes right?

According to Nobel economist Friedrich Hayek, a contemporary of Keynes and perhaps his greatest critic, Keynes "was guided by one central idea . . . that general employment was always positively correlated with the aggregate demand for consumer goods." Keynes argued that government should intervene in the economy to maintain aggregate demand and full employment, with the goal of smoothing out business cycles. During recessions, he asserted, government should borrow money and spend it.

Keynes's thinking was a decisive departure from classical economics, because arbitrary "macro" constructs like aggregate demand had no basis in the microeconomic science of human action. As Hayek observed, "some of the most orthodox disciples of Keynes appear consistently to have thrown overboard all the traditional theory of price determination and of distribution, all that used to be the backbone of economic theory, and in consequence, in my opinion, to have ceased to understand any economics."

A father of public choice economics, Nobel laureate James Buchanan, argues that the great flaw in Keynesianism is that it ignores the obvious, self-interested incentives of government actors implementing fiscal policy and creates intellectual cover for what would otherwise be viewed as self-serving and irresponsible behavior by politicians. It is also very difficult to turn off the spigot in better economic times, and Keynes blithely ignored the long-term effects of financing an expanded deficit."

Thursday, March 12, 2009

Christopher Linglesays in the Korea Times“there is the elephant in the room that nobody wants to notice: rising price inflation. But myth making about this being a redux of the Great Depression induces the Federal Reserve to orient monetary policy toward warding off deflation.

But this is not your grandfather's recession. It is more like the one conjured up by Jimmy Carter. In a single term of office, President Carter oversaw double-digit inflation, double-digit unemployment, double-digit interest rates, shrinking incomes and increasing poverty.”

In the course of learning good economics person like me often handicapped by all left, right, and centrist…

So let’s try to be no part of any “ist”. It does not mean that the difficulty of learning good economics is over.

When we enter school we often preached “be honest, never be a rude to any one even to animal (some extent), always say truth, etc.

These slogans slowly become never in any part of student life in Indian colleges and universities.

The person who never seen the colleges and universities wall no doubt is in peril at the spicy politics of criminals but less of good men.

Max Veber once wrote a piece in which he described quite interestingly “politics is vacation” often for unemployed youths!

So no surprise the other part of a persons life is often illustrated in the newspapers, TV etc. No wonder there is a dangerous academic life for many satirist who never knew the full subject knowledge but somehow knew how to play the politics gamble in the inside four walls of “class room”.

Lets see what one academician says (forget how dangerous he and his ideas. Paul Samuelson often credited for his classic textbook of Economics with “much gloom and doom”) about present financial crisis. He says “….famous Austrian, Friedrich Hayek, then resident in the UK, earned perpetual guilt for similar insistence on limiting any expansion of credit during the 1931 deflation. It is reported that, in a London seminar deep in the Depression, J.M. Keynes’ young associate, Richard Kahn, asked Hayek: “Do you mean that if I borrow a pound from you and spend it on consumption, I am making the depression worse?” Hayek replied: “Yes, and it is very complicated to explain why.” But it is easy to explain why Hayek’s reputation as a macroeconomist collapsed.”

Mind you, he has not said about what caused the present crisis.

It is relevant to cite from a banker turned economics journalist, in today’s ET titled as “When practice doesn’t make perfect’”. This is answer to Mr Paul dangerous centralist preach of one side economics.

Monday, March 9, 2009

Economist Meghnad Desaisays Chacha “Manmohan Singh began the new economic policy in 1991 and lifted India out of the old Mahalanobis nightmare.” And “There were doubters at that time whether liberal economic reforms would work or whether India would be signing itself for a new slavery or get trapped in a debt-default saga. None of these happened, and India began a regime of growth rates which never went below 5 per cent when, in the previous 45 years, they had rarely been above.”

It is not “there were doubters at that time whether liberal economic reforms would work” or not. The same sentiments prevails every economics department in Indian university even today. When will these folks give up their dogmatic marching towards “old Mahalanobis nightmare”.

If any things that the left has done to Indian poor during the last five years the following are.

“The Left prevented at least four initiatives which, we think, were very important in protecting our country from complete devastation. One, we blocked the capital convertibility of the rupee that they wanted. Second, permission to foreign banks to raise their equity in Indian private banks and to have directors in proportion to that equity. If that had happened, with the foreign banks collapsing, many of our Indians banks would have gone down the same road. Third, preventing privatisation of pension funds. And lastly, ensuring that FDI caps in insurance were not raised. These steps provided strength to the economy.

Once you allow FDI (in retail), millions of people will lose their jobs. And we said that no FDI can come to India that will reduce jobs”.

Wednesday, March 4, 2009

Almost, Mr TCA become a bogus analyst with horrified mind said a friend of mine.

Well, if any one I wanted to call notorious in the analysis of Indian economy it will be “Cornell economist Kaushik Basu”.

Mr Basu said in his Sage - Madras School of Economics Endowment Lecture (2007) “one undeniable factor is that India’s savings and investment rates had risen sharply from the late sixties to the late seventies. What caused this? Clearly, the nationalization of banks in 1969, with the state-owned banks being forced thereafter to open branches in remote areas of India, and the start of Unit Trust of India in 1964 were key factors in boosting the savings rate, which in turn was the first impetus for rapid growth”.

Nonetheless, the question is important Mr. Basu “once asked why everyone held an opinion on economics but not on aircraft design. He was arguing that economics was a specialisation requiring technical skills that were no less rigorous than those required of an aircraft designer”.

Some time back Mr TCA seems to be good analyst of economics and politics but now I realised that he also misdirected his readers. He simply scraped the India’s reforms of past 15 or more years. “….This was a big intellectual leap, made largely in the 1980s, which became mainstream faith in the1990s and in this decade. Its consequences confront the world now in the form of the financial disaster it has caused”.

No doubt, I agree with at least this point that “It was that if you got the market design right, the danger of market failure was almost nil. This assumption led to the influx of engineers, scientists and physicists into a domain that superficially looked like their own but contained, alas, humans also, with all their foibles”.

No matter how many business analysts, journalist, and other “…..harking back to Keynes now but nowhere did he say that the taxpayers should pay the price of private folly and greed via bailouts What he said was governments should buy goods and services when private demand fell short of what installed capacity could provide. He was treating a different problem, namely, the survival of the poor, not of the rich”.

Our academicians including the economics departments of Indian universities are in deep sleep. They cannot back to Keynes nor look forward to Hayek or anyone else.

It is no less folly to blame only “private folly and greed via bailouts”. Election after election, schemes after schemes, law after law, Acts after Acts, rules after rules, etc goes with publically announced “bailouts” in the name of “poor” without mining whether it reaches or not.

What remains a big mess is the Constitution of India which becomes focal point for everyone to speak but not to adhere, morally, mentally and physically and be responsible when get elected by people of this country.

In The American SpectatorJeffrey Lord re-opens the idea of Mr M K Gandhi.

“There's something to be learned from Mr. Gandhi, something capitalists everywhere in America should seriously ponder. They are being targeted today just as surely as were the citizens of India all those years ago. Gandhi taught his fellow citizens to think outside the box, to simply refuse to cooperate with their persecutors.

From urban street corners to suburban malls to lonely outposts in the rural plains, eventually it dawns on a startled populace. There are no trucks out there hauling American products or, for that matter, products from anywhere. The truckers too have kissed off the Obama bureaucrats who want to raise their gas tax and tax them by the mile. And so, they simply stayed home or, caught on the highway, pulled to join the lengthening train of motionless trucks forming a peculiar guardrail for passing cars.

Accessing a mostly frozen Internet is done by the pulse of dying, un-rechargeable batteries. There is no Fox, which makes liberals chortle, until they realize there is none of anything else on the nation's suddenly blank screens”.

It is worth to read but at least it is not fully clear to my mind that what could be the way or method to bring those hard or core change to masses when classes determine the fate of those masses.

It freedom sense, it is crime, to do so, but our rulers did every year after the independence.

We are still patient waiting for a good doctor to cure the ills created by our own home grown political pundits (including some foreign origin).

If at all I agree with Mr Nandan Nilekani‘s argument of “the demographic 'dividend' could well turn out to be a demographic 'disaster”, it is this sense that the young age population which goes with criminal politicians during election rally, unwanted strikes, party mobs, etc without mindfulness of their business which obviously become “a demographic 'disaster” for the country which is often said ‘young’.

Thanks to politicians for making folly of this young population otherwise mind their business in life even if they don’t bother to listen, their parents or elders advice, or teachers etc.

Now, Mr Nandan Nilekani is a gust blogger and he says how wrongly-it seems to be cut short vision.

The Indian economy is going to play a major role- no matter how the ups and down. No doubt few will play like a king maker-and the blood shade will make easer for pink newspaper editor for their head line news. It does not surprise to me at least who is going to be terrible, good or bad policy maker for at least next five years. Many elections came and gone. History has shown how many representatives have had voted Bills which are not in interest of people who have elected them.

What is called prime resource now was called walking dead bodied at least a few years ago. I mean the population in general and the young age population in particular. No doubt the truth will triumph with its own time. Those who have questioned wrongly about the unproductive population now premise to save or attempt to make them productive. I mean the “demographic dividend”.

Mr Nilekani says in front of the coming general election “Without quick action the demographic 'dividend' could well turn out to be a demographic 'disaster'. The next five years is our final chance”.

I do aware that nowhere Mr Nilekani said population is a problem including in his Imagining India book, which I read this January.

Four years ago my M.Phil theses professor said during one of our class discussion. I said many studies have shown that the Public Distribution System is dysfunctional in India. And only 10 or some percent of ration reaches the poor people or targeted ones. The rest is smuggled in between politicians and government official hands. He said the 10or some percent is great achievement of PDS system we should welcome it!

So this is how the UPA has given Job guarantee scheme which is unproductive, in the last five years, many have already questioned the UPA government achievements. Mr Nilekani put it differently “….they have in essence, done everything short of what is truly necessary” and ….”We have stumbled badly in the last several years when it has come to creating organized sector jobs and expanding access to education and skills training to the people who need it”.

It is also true that when we all looking election after election what our government can do for us from unimagined taxes that it collects from us but we all failed to realize what it can not do, really. Indeed. The world has shown us the several other alternatives to development good society. Are our elected representatives ready to learn? The answer is no as the history has shown.

In sum, there is no such thing as a “final chance”. Instead we must believe that every criminal who got elected in our democratic system should get no more chance to fool us. In other words, we must make fool of them not as business but in every walk of life. When I say this I stuck with the kind of police and court system we have now, will that save our life or the criminal life?

Monday, March 2, 2009

Jug Suraiya writes in the TOI “Poverty, like AIDS, is not shameful. What is shameful is that more than 60 years after independence poverty continues to exist in our midst, in the midst of India Shining, and India Winning, and India Rising, like a curable, or least preventable, but chronically neglected disease. The reaction against Slumdog Millionaire and other works of its kind that have shown us the face of our disowned poverty is rooted in a misplaced sense of shame. What we are or ought to be ashamed of is not our poverty but of our attempts to wish it away, to sweep it under the carpet, to decry all depictions of it as commercial exploitation and social and cultural voyeurism”.

When every body talks about big spending including in India of course these people don’t understand all other alternatives to revive the economy, and some suggest that the only way left us is to continuously remind them. So that in the course, they will start thinking what has been told and untold to them. Here liberal economist Christopher Linglewrites in The Japan Times “Once again the laws of men are being implemented to supersede economic laws that require much price and wage adjustment during a recession so that markets can clear. This clearing serves the best interests of the overall community by enabling unemployed labor and misused capital assets to be put to productive and profitable use. Only then can there be a sustainable economic recovery”.

What is look more strangely is the children and student who try to learn economics with open mind, but taught all dismal side economics without showing the alternative method to think.